Stornoway Diamond Corporation

Stornoway Diamond Corporation

March 14, 2005 19:45 ET

Stornoway Third Quarter Financial Statements and Interim MD&A


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: STORNOWAY DIAMOND CORPORATION

TSX SYMBOL: SWY

MARCH 14, 2005 - 19:45 ET

Stornoway Third Quarter Financial Statements and
Interim MD&A

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 14, 2005) - Stornoway
Diamond Corporation (TSX:SWY) has filed its interim consolidated
financial statements and its Management Discussion and Analysis (Form
51-102F1) for the nine months ended January 31, 2005 with the regulatory
authorities through SEDAR (www.sedar.com) and has mailed them to
shareholders whose names appear on its Supplemental List. The interim
financial statements were prepared by management in accordance with
Canadian generally accepted accounting principles and were not reviewed
by Stornoway's auditors. This news release is being issued pursuant to
National Instrument 54-102.

Highlights of Stornoway's diamond exploration activities during its
third quarter for fiscal 2005 are:

- Kimberlite drilling intercepts from AV1A, AV2, AV3 and AV4 all return
diamonds from caustic fusion analysis.

- Surface kimberlite samples from AV5 return diamonds from caustic
fusion analysis.

- Continued to receive laboratory results from the 2004 till sampling
program and expect final results during the spring of 2005.

- Received final results from airborne geophysical surveying completed
in 2004 and interpretation is now ongoing.

- Four new 100% owned projects totaling 800,000 acres defined and
acquired in Nunavut and northern Manitoba based on generative work from
2003 and 2004.

The Company's loss from operations for the nine months ended January 31,
2005 totaled $3.2 million, a loss of $0.04 per share, as compared to a
loss of $0.95 million for the nine months ended December 31, 2003, a
loss of $0.02 per share. Assets increased from $39.8 million as at April
30, 2004 to $61.1 million as at January 31, 2005. Capitalized resource
property costs also increased, from $15.5 million as at April 30, 2004
to $26.9 million as at January 31, 2005. During the nine months ended
January 31, 2005, the Company expended $13.2 million to acquire and
explore its resource properties (December 31, 2003 - $4.8 million).
General and administrative expenses increased as compared to the prior
period, from $0.79 million in the nine months ended December 31, 2003 to
$2.1 million in the nine months ended January 31, 2005.

During the nine months ended January 31, 2005, cash and equivalents
increased by $8.5 million, from $23.2 million as at April 30, 2004 to
$31.8 million as at January 31, 2005. The increase in the Company's cash
position is attributable to net proceeds of $18.7 million from a private
placement in May 2004 and warrant and option exercises during the
current period totaling $5.3 million. The Company's working capital as
at January 31, 2005 was $31.8 million as compared to working capital of
$21.8 million as at April 30, 2004.

As at January 31, 2005, the Company's share capital was $73.7 million
representing 72,634,195 common shares without par value (April 30, 2004
- $48.7 million - 61,499,412 common shares). Included in share capital
are stock-based compensation amounts totaling $2.6 million (April 30,
2004 - $1.6 million). The deficit was $14.0 million (April 30, 2004 -
$10.8 million) as at January 31, 2005. Shareholders' equity was $59.7
million as at January 31, 2005, as compared to shareholders' equity of
$37.9 million at April 30, 2004.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Eira Thomas, President

This news release may contain forward looking statements, being
statements which are not historical facts, including, without
limitation, statements regarding potential mineralization, exploration
results, resource or reserve estimates, anticipated production or
results, sales, revenues, costs, "best-efforts" financings or
discussions of future plans and objectives. There can be no assurance
that such statements will prove accurate. Such statements are
necessarily based upon a number of estimates and assumptions that are
subject to numerous risks and uncertainties that could cause actual
results and future events to differ materially from those anticipated or
projected. Important factors that could cause actual results to differ
materially from the Company's expectations are in Company documents
filed from time to time with the Toronto Stock Exchange and provincial
securities regulators, most of which are available at www.sedar.com. The
Company disclaims any intention or obligation to revise or update such
statements.


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